A look at the day ahead in European and global markets from Ankur Banerjee

A risk-on rally fuelled by rising expectations the Federal Reserve will stand still on interest rates in two weeks, and by relief that the congress approved a U.S. debt-limit suspension, took hold in Asia and looked set to continue as Europe wakes up.

The U.S. Senate late on Thursday passed bipartisan legislation backed by President Joe Biden that lifts the government's $31.4 trillion debt ceiling, a day after the House of Representatives approved the bill.

And so, the U.S. averts what would have been a first-ever and catastrophic default. The Treasury Department had warned it would be unable to pay all its bills on June 5 if Congress failed to act.

Markets though seemed to have moved on to focus on what the Fed will do in two weeks as U.S. economic data bolstered the case for the Fed to stand pat.

Dovish rhetoric from Fed officials, including comments by Philadelphia Federal Reserve President Patrick Harker on Thursday that it was "time to at least hit the stop button" on rate hikes, has also helped to lift sentiment.

Futures trading indicated an 80% probability that the Fed will refrain from raising rates, compared with a 48% probability a week earlier, according to the CME FedWatch tool.

That all served as fuel for a surge in Asian markets, with the MSCI Asia ex-Japan share index set for its best day since January, while the Nikkei continued its hot run, setting the stage for an exuberant Friday for European markets.

The pan-European STOXX 600 index, which has been languishing near two-month lows, should get a lift.

The U.S. Labor Department's closely watched unemployment report for May is due later on Friday, with the data helping to determine whether the central bank sticks to its aggressive monetary policy.

In the corporate world, Goldman Sachs plans to cut more jobs, the bank's president said, as a difficult economic environment weighs on dealmaking. In January, it let go about 3,200 employees, its biggest head count reduction since the 2008 financial crisis.

At Twitter, the head of trust and safety, Ella Irwin, told Reuters on Thursday that she has resigned from the social media company, which has faced criticism for lax protections against harmful content.

Key developments that could influence markets on Friday:

Economic events: French industrial output data; U.S. nonfarm payroll

(Reporting by Ankur Banerjee in Singapore; Editing by Edmund Klamann)